Using Chat GPT for Lender Conversations

[Benjamin Sulka]

Hey BP Forums! 

Wanted to share something interesting with the lending community and get your take on it. I was preparing for a conversation with a lender regarding FHA 203(k) loans. I have a basic understanding of the loan product (income, credit score, loan limits, etc.) but wanted to ask more in-depth questions that I may not have considered.

What I asked ChatGPT

Prompt: I'm having a conversation with a lender about the FHA 203(k) renovation loan to use to buy a property. What would be beneficial questions to ask the lender about this product?

AI Answer: 

1. Eligibility Requirements: What are the qualifications needed to apply for this loan? Are there any specific criteria I need to meet?

2. Loan Types: Are there different types of FHA 203(k) loans available? Which one would suit my needs best?

3. Loan Limits: What are the maximum borrowing limits for this loan program? How are these limits determined?

4. Property Eligibility: Can this loan be used for any property, or are there limitations regarding the type or condition of the property?

5. Renovation Allowance: How much of the loan amount can be allocated for renovations? Are there any restrictions on the types of renovations allowed?

6. Interest Rates and Terms: What are the interest rates for this loan? Are they fixed or adjustable? What are the repayment terms?

7. Down Payment and Closing Costs: What are the down payment requirements for this loan? Are there any assistance programs available for closing costs?

8. Process and Timeline: What is the application process like? How long does it typically take to get approval and close on the loan?Contractors and Inspections: Are there specific requirements for contractors? What is the process for inspections and releasing funds for renovations?

9. Financial Requirements: Are there any financial qualifications or credit score benchmarks I should aim for to secure this loan?

10. Additional Fees: Apart from interest rates and closing costs, are there any other fees associated with this loan?

11. Escrow Account: Will an escrow account be set up for renovations? How will disbursement of funds for renovations be managed?

12. Exit Strategy: Is there any specific timeline or requirement for completing the renovations? What happens if the renovation isn’t completed within the specified period?

13. Risks and Protections: What are the potential risks associated with this loan? Are there any protections or contingencies in place if issues arise during renovations?

14. Documentation Needed: What documents will be required during the application process?

Remember, discussing these aspects in detail with your lender can provide a clearer understanding of the FHA 203(k) renovation loan and ensure it aligns with your needs and goals.

__________________________________________________________________________

Would love to hear if any lenders scrutinize any of these questions or would add any additional ones! 

-Ben, aspiring rental property investor